ECB vows to spur the EU economy

Fabio Panetta

The European Central Bank expressed its intention to protect and boost EU economy. ECB noted that it is committed to enforce further and stronger stimulus packages, aimed at supporting the single currency and the European economies, bank’s board member Fabio Panetta told Reuters.

With the bloc heading back into recession this quarter, the ECB approved more support last week but remarks from ECB chief Christine Lagarde that not all of its allotted firepower may be used raised some doubts about its commitment. “We can guarantee our commitment to support the recovery,” Panetta said in a speech. “We stand ready to adjust all our instruments if downside risks to the outlook become facts, including those stemming from exchange rate dynamics.”

The euro is trading near 2-1/2-year highs against the dollar, a drag on exports and inflation and an issue highlighted by policymakers last week.

“There should be no doubt here: the ECB will not accept inflation settling at levels that are inconsistent with its aim,” said Panetta, who is considered one of the top supporters of the euro zone central bank’s ultra-easy policies.

Panetta also called on European leaders to use the European Union’s 750 billion euro fiscal support package wisely as it could raise growth 1,5% by 2026, with Italy, one of the bloc’s most indebted countries, standing to gain up to 3,5%.

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